THE IMPACT OF THE CHOICE OF ASSET VALUATION TECHNIQUES ON THE VALUATION OF AGRICULTURAL ENTITIES: A CASE STUDY

Abstract

Research aim is to analyse the impact of the choice of asset valuation methods on the financial performance of agricultural entities. Research problem: different methods can be used to value the assets of an agricultural entity in its financial statements. The choice of valuation method affects not only the accounting for all transactions relating to the use of assets, but also the financial position of the enterprise and its current and future performance. Therefore, there is a need to determine which valuation methodology reflects a more realistic representation of the financial position of the agricultural entity and provides users with true and fair information. In order to analyse the impact of asset valuation techniques on the financial performance of the enterprise, a simulation model was developed based on the data AC X. It was found that the valuation of fixed assets at revalued amount and of biological assets at fair value less point-of-sale costs has a significant impact on the financial performance of AC X. The application of fair value based methods results in an increase in the value of total assets, equity and liabilities on the company's balance sheet, and also increases the company's profits, which in turn leads to an increase in the profitability of sales. The return on assets and return on equity decrease. Indebtedness ratios are also reduced, making the company more attractive to creditors.